Suppose you are buying your first home for $144,000, and you have $17,000 for your down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at a 6.40% nominal interest rate, with the first payment due in one month. What will your monthly payments be? Group of answer choices $831.93 $857.64 $753.30 $714.27 $794.39
Suppose you are buying your first home for $144,000, and you have $17,000 for your down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at a 6.40% nominal interest rate, with the first payment due in one month. What will your monthly payments be? Group of answer choices $831.93 $857.64 $753.30 $714.27 $794.39
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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Suppose you are buying your first home for $144,000, and you have $17,000 for your down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at a 6.40% nominal interest rate, with the first payment due in one month. What will your monthly payments be?
Group of answer choices
$831.93
$857.64
$753.30
$714.27
$794.39
Expert Solution
Step 1
purchasing price = $144,000
down payment = $17,000
loan amount = $144,000 - 17,000
= 127,000
below is the calculation to calculate size of monthly payment
here is the formula
EMI = [p*r*(1+r)n]/[(1+r)n-1]
p = $127,000
r = 6.40/12 =0.00533
n = 30 * 12 = 360
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